Audit-Report-on-NNPC

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Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) Held discussions with relevant principal officers of the Supply & Distribution Department of PPMC, to understand the various activities undertaken by PPMC in the importation of PMS and DPK. Obtained and reviewed PPMC’s records of PMS and DPK importation into Nigeria between January 2012 and July 2013. Obtained and reviewed some correspondence/letters between PPMC and PPPRA to identify past issues raised by PPPRA and responses given by PPMC on PMS and DPK importation into Nigeria between January 2012 and July 2013. Using PPMC’s records and documents provided for PMS and DPK importation into Nigeria between January 2012 and July 2013, we summed up the total volume of DPK sold to other Nigerian marketers. Obtained and reviewed samples of Pro Forma Invoices (PFIs) issued by PPMC to other Nigerian marketers at the point of sale of DPK between January 2012 and July 2013, to ascertain the prices charged by PPMC for the sale of DPK. Held discussions with some Nigerian marketers to understand the procedures and activities involved in the purchase of DPK from NNPC/PPMC. Obtained and reviewed public information for the actual retail prices of PMS and DPK in Nigeria. Held discussions with some officers of NNPC and PPMC to understand the components of the selling price of DPK contained in the Pro Forma Invoices (PFIs) issued to other marketers in Nigeria. We made adjustments to the actual Landing Costs (LC) of DPK by excluding other cost elements incurred by other marketers but which have been included in the PPPRA’s DPK Subsidy computations. This was to estimate the actual cost incurred by NNPC to bring the product Offshore Lagos. For the purpose of comparison with the <strong>Report</strong> of the Reconciliation Committee, we adopted the exchange rate of $1=N154.87, used by the Reconciliation Committee. Vanguardngr Subscribed to and reviewed records of global vessels in the Lloyds List Intelligence as well as Thompson Reuters Eikon Databases, to confirm the existence/presence of the Mother Vessels and Shuttle Vessels recorded to have discharged petroleum products (PMS & DPK) in Nigeria. Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 66
Investigative Forensic audit of crude oil revenues and remittances by NNPC (January 2012 – July 2013) 4.4.3. Limitations We were not provided with and could not review all the working papers used in generating the market prices and volumes used in the joint submissions of DPR, PPPRA and NNPC to the Senate. We did not test the authenticity of the documents presented to us by PPPRA, NNPC as well as all other subsidiaries of NNPC. Lloyds List Intelligence and Thompson Reuters Eikon databases could not provide information on the ownership of the products being carried by vessels or the kind of petroleum products (e.g. DPK or PMS) being carried. We could not verify all additional costs incurred by other marketers after buying DPK from PPMC to explain the difference between the official retail price of DPK (N50) and the actual retail price (N120 – N140 42 ). 4.4.4. Key Findings 4.4.4.1. Issues in the verification process of NNPC’s PMS and DPK discharges by PPPRA In its letter of 24 September 2012 with reference number PPMC/S&D/049 43 to PPPRA, PPMC stated its challenges in putting together all the import documents for discharges that occurred before September 2012, and requested for waivers on these pre-September 2012 imports. This letter was signed by Engr K.O.K Omiogbemi on behalf of the MD of PPMC and acknowledged as received by PPPRA on 3 October 2012. In its response to the letter of 24 September 2012 from PPMC, PPPRA in a letter 44 signed by V.Z. Shidok, with reference number PPPRA/LZ/IM.77/1/110 on 3 October 2012 stated as follows: “…While appreciating the concerns of PPMC on the issues raised in the referred letter, we equally wish to state that our request was occasioned by the on-going probe on PSF administration by investigators appointed by the government for that purpose. You would recall that prior to the present investigation, the said documents were being overlooked by the Agency (PPPRA) but the demand for the documents by the investigators, have made it more compelling for them to be made available, more so that they can easily be sourced from the cargo suppliers. ..” Vanguardngr 42 Source: http://www.thisdaylive.com/articles/kerosene-dpr-tasks-private-depot-owners-on-high-price/164477/ 43 Exhibit D2 – PPMC’s letter of request for waiver to PPPRA as a result of unavailable import documents 44 Exhibit D3 – PPPRA’s first response to PPMC on the request for import documents waiver Confidential information for the sole benefit and use of the <strong>Audit</strong>or-General for the Federation. PwC 67
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